Fitbit’s Surge Smartwatch Beautifully Marries Microsoft’s Cortana on Windows Phones

Fitbit and Apple (AAPL 1.27%) have been waging a passive-aggressive war against one another over the past few weeks. First, Fitbit snubbed Apple's Healthkit platform. Apple responded by announcing that it would stop selling Fitbit devices in its Apple Stores. Reports then emerged regarding a "superwatch" known as the Fitbit Surge, which seemed squarely aimed at taking down Apple's Watch.

On Oct. 27, Fitbit officially unveiled the Surge, along with two new fitness trackers, the Charge and Charge HR. The Surge, which will cost $250, has a built-in GPS, motion sensors, a heart-rate monitor, and can last up to a week on a single charge. It can also be used as a remote control for the smartphone and receive notifications. The Charge ($130) and Charge HR ($150) are updated versions of the Fitbit Force, which was recalled earlier this year due to reports of skin irritation. The HR version includes a heart rate monitor.

Source: Fitbit.

But Fitbit's biggest revelation was that it would integrate its Windows Phone app with Microsoft's (MSFT 0.37%) voice assistant Cortana for tracking daily activities and food intake. In other words, a user could say, "Cortana, I ate a slice of pizza for lunch," which would trigger a database search of over 350,000 types of food identified by Cortana's natural language processing abilities. This is a rare victory for Microsoft and Windows Phone users, since Fitbit isn't offering similar integration with Apple's Siri or Google (GOOG 0.74%) (GOOGL 0.55%) Now.

So why did Fitbit court Cortana instead of those rival voice search platforms, and what could this vote of confidence mean for the future of Microsoft in mobile health and wearables?

What Fitbit is up to
Fibit is the top fitness band maker in the world with a 69% market share, according to NPD Group. It also has nearly 40 partners -- including MyFitnessPal, MapMyFitness, Walgreens, and Microsoft -- which synchronize their fitness apps to Fitbit's devices. In other words, Fitbit was doing perfectly fine before Apple launched HealthKit.

If Fitbit connects to HealthKit, it would share its user data in the iOS 8 Health dashboard alongside data from other fitness apps and wearable devices. But that could render its own mobile app and health ecosystem obsolete, causing it to lose its competitive edge against rivals like Jawbone. Moreover, teaming up with Apple would fragment Fitbit's user base, since its devices are also compatible with Android and Windows Phone devices.

Teaming up with Microsoft initially seems like an odd move, since Windows Phone only controls 2.5% (IDC) of the global smartphone market, compared to 11.7% for iOS and 84.7% for Google Android. But it makes sense, since Windows Phone is the only mobile OS which lacks a unified fitness/health care platform -- Apple has HealthKit, and Google just launched Google Fit. Therefore, Fitbit can nurture its own mobile ecosystem on Windows Phone, without worrying about Microsoft suddenly killing it off with a unified dashboard.

Good news for Microsoft
As Apple teases the Apple Watch, Samsung (NASDAQOTH: SSNLF) floods the markets with wearables, and Google tries to unify the wearables market with Android Wear, Microsoft has been noticeably absent from this land grab in smartwatches.

The only thing we know about Microsoft's wearables business is that it will launch the $200 Microsoft Band, compatible with Windows Phone, iOS, and Android, this holiday season. Fitbit's introduction of Cortana integration could certainly complement that device and get mobile fitness enthusiasts interested in Windows Phones. Meanwhile, Microsoft's online health ecosystem centers around HealthVault, a personal health record (PHR) which synchronizes to certain electronic health records (EHRs). Although it launched seven years ago, Microsoft still hasn't smoothly integrated HealthVault into its mobile devices.

Microsoft's HealthVault app for Windows 8. Source: Microsoft.

However, Microsoft has been slowly integrating HealthVault into its main cloud-based platform, Azure, so it can synchronize health data across multiple devices when Windows 10 launches next year. For example, Microsoft recently rebranded its Bing Health & Fitness App as MSN Health & Fitness, which now synchronizes directly with Azure instead of HealthVault.

Microsoft might be a wimp when it comes to smartphones, but it still controls over 90% of PCs worldwide via Windows. If Microsoft gets all of these users on the same page with Windows 10, promotes the use of Cortana on phones, tablets, and PCs, then synchronizes that data to Azure, it could be a great way for any wearables manufacturer to track personal health data across multiple platforms.

Therefore, partnerships like the one with Fitbit will leverage Microsoft's dominant market share in PCs to build a cloud-based health-tracking ecosystem that could easily become much larger than HealthKit or Fit. Once that happens, Jawbone, Withings, and others will likely pay much more attention to Microsoft.

The effect of Apple Watch
The global mobile health market, which includes all fitness apps and wearables, is projected to grow from $1.95 billion in 2012 to $49 billion by 2020, according to Grand View Research.

Fitbit is clearly determined to remain a relevant player in this growing market, even as $13 fitness bands arrive and the $150 to $300 range in the smartwatch market is flooded by similar devices. Snubbing Apple and teaming up with Microsoft was certainly a bold move, but we'll have to wait and see if Fitbit's strategy can protect its market share when Apple's Watch arrives in 2015.